Round One: Google vs EU

June 29, 2017

The EC's decision to fine Google nearly €3b will be a soap opera like no other & could have longer-lasting implications for Google

This week, the EU’s antitrust watchdog fined Google €2.4 billion for manipulating search results to favour its own shopping services over competitors’ offerings. The fine is the largest antitrust penalty issued by the European Commission (EC), which gave Google 90 days to give “equal treatment” to competing services in its search results.

Bloomberg

So Google “flaunted” EU antitrust rules, denying other companies the chance to compete on merit and innovate. The EC claim it denied European consumers a genuine choice of services. This is a slippery slope littered with banana skins, as the decision doesn’t touch upon other Google functions such as maps and images, and their search engine that’s now synonymous with search.

Google have claimed that when you search for products, Shopping will try to give you what you’re looking for. One could build the case that Amazon has denied other companies the chance to compete on merit, with their sheer scale and delivery proposition backed by hard work and constant innovation – foundations that Google’s success is built upon, alongside user feedback. Google make the case that thousands of European merchants use these ads to compete with larger companies like Amazon and eBay; and Shopping is undoubtedly one of Google’s strongest weapons against Facebook & Amazon.

If Google fails to change its practices within 90 days, Alphabet, its parent company, would face penalty payments of 5% of its daily global turnover. This might lead to a Google search engine with reduced features in Europe – but if Google appeal, we’re talking years before anything is resolved.

Google Kings Cross-1

Robert Atkinson, president of the Information Technology and Innovation Foundation, a Washington-based think tank, said in a statement “The EU’s actions have created a cloud of uncertainty that will make large tech companies overly cautious about making changes to the user experience and service offerings that would benefit consumers.” The move is also likely to provoke comment from senior industry figures in the US, who in the past have criticised the EC for seemingly discriminating against American tech companies. Back in 2016 the antitrust body hit Apple with a $13bn tax bill, prompting chief exec Tim Cook to pen a lengthy letter to combat the outcome of the three-year investigation.

Watch this space. Perhaps Brexit negotiations have got off to a flying start…

 

David Walby, Biddable Account Director


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